2008 ALA Finances 101 ALA Finance Workshop The Operating Agreement Audra Caplan and Charles Kratz, Jr. Philadelphia Marriott, Salon K/L Friday - January 11, 2008

2008 ALA Finances 101 ALA Policy 6.4: Divisions Better known as: The “Operating Agreement”

2008 ALA Finances 101 Policy 6.4: Divisions Approved by the ALA Council on June 28, 1989 in Dallas, Texas

2008 ALA Finances 101 What is in the Operating Agreement? 3½ pages in the Handbook of Organization 5 guiding principles or values Procedures Practices Provisions Protections

2008 ALA Finances 101 Principles & Values Unity—“ALA is one association” –“Divisions and all other units of ALA are inextricably linked…” –“…the Divisions serve the American Library Association as a whole” –“By supporting Division operations…ALA gives tangible evidence of its recognition of the importance of divisions …”

2008 ALA Finances 101 ALA

2008 ALA Finances Additional Values Diversity—“ALA has a stake in the work of each of its Divisions.” Authority—“ALA delegates to each Division authority…in designated areas.” Autonomy–“Divisions are best able to carry out their missions when their members have the autonomy, independence, and freedom to pursue goals and objectives of particular concern to them…”

2008 ALA Finances 101 The Fifth Value Collaboration/Cooperation—“ALA and its Divisions have opportunities…to stimulate and build on one another’s strengths and resources to advance shared, as well as diverse, goals.”

2008 ALA Finances 101 Procedures Annual review of Policy 6.4 –A shared responsibility ALA management BARC, representing ALA members Division leaders Division executive directors –Responsibility of BARC to initiate review Midwinter BARC/Divisions meeting At Annual Conference a standing item on PBA agenda BARC depends upon the divisions to set that agenda

2008 ALA Finances 101 Procedures Operational Practices –Nuts-and-bolts implementation of 6.4 –Developed collaboratively by ALA management and Division executive directors

2008 ALA Finances 101 Practices ALA basic services Division Basic Services Overhead Mandated services

2008 ALA Finances 101 Practices—Mandated Services In the spirit of the five shared values, ALA provides certain services to the Divisions. These services include : –Human Resources –Membership Services, –Telephone –Purchasing –Fiscal Services Department –Legal Counsel –Office space 50 East Huron Street

2008 ALA Finances 101 Practices—ALA Basic Services American Libraries Accreditation ALA library services Government relations (e.g., Washington Office) Intellectual Freedom Awards & scholarships

2008 ALA Finances 101 Practices—Division Basic Services Journal, newsletter Membership promotion & retention Awards & Scholarships Your staff!

2008 ALA Finances 101 Practices—Overhead Divisions pay overhead to ALA in the form of indirect costs. –For revenue-generating operations –Based on a study conducted annually Building, Utilities, Finance, Accounting, Human Resources etc.

2008 ALA Finances 101 Provisions—ALA to the Divisions Office space Telephone Basic furniture and equipment Equipment maintenance Personnel services Purchasing Data processing Member services Public Information services Fiscal services Copyright services

2008 ALA Finances 101 Indirect Costs* Divisions and General Fund Support *Based on 2006 Indirect Cost Study

2008 ALA Finances 101 Provisions—Collaboration Publications—ALA Publishing has right of first consideration ALA Publishing Services pays royalties on division publications ALA markets audio recordings of Conference programs and pays royalties to Divisions

2008 ALA Finances 101 Provisions—ALA to the Divisions: Conferences Staff travel costs Meeting rooms Office space at conference site Exhibit space at Annual Conference Equipment (including cost of labor)

2008 ALA Finances 101 Provisions—Where Divisions are Self-reliant Division personnel Furniture and equipment purchased by the divisions for their exclusive use Projects not specified in Policy 6.4 Endowments

2008 ALA Finances 101 Protections Budget review –Internal within Division –BARC & ALA management Small Divisions –Subsidy, up to 50% of operating expenses –ALTA & ASCLA

2008 ALA Finances 101 Implications Know what 6.4 says and does! Communicate Communicate! Communicate!!! Shared responsibility –Division leaders and Division staff –ALA senior management –BARC

2008 ALA Finances 101 It is a living document! It is NOT carved in stone!